Michael Munger write about universal basic income for The Hill

Friday, July 20, 2018

At a time when even the wealthiest nations face problems of poverty, many analysts are concerned about creating jobs in the “new” economy. Are traditional anti-poverty programs up to the task? I don’t think so.

Many people, from diverse viewpoints, are talking about a universal basic income (UBI) grant. UBI was recently tried in Finland, though it was discontinued. As a recent New York Times article pointed out, that effort was half-hearted.

In California, the city of Stockton is piloting a program that will give 100 citizens $500 per month for 18 months. Even a large city (Chicago) is considering a version of UBI. Is UBI the future? To find out, let’s first look at the past.

In 1848-49, a wave of revolutions swept the capitals of Europe. Vaguely dubbed “The Peoples’ Spring,” it wasn’t clear just what the revolutionaries wanted.

Some were fed up with the desiccated royal families holding onto thrones; others were fighting a rear guard action against the Industrial Revolution, which was wiping out the ability of traditional villages from making a living.

The nations of northern Europe, finding their cities ablaze and their workers desperate for security amid chaos, began to adopt what we now call “welfare” systems.

In a German Reichstag speech in 1884, Chancellor Bismarck said, “The actual complaint of the worker is the insecurity of his existence; he is unsure if he will always have work, he is unsure if he will always be healthy and he can predict that he will reach old age and be unable to work.”

The welfare programs that achieved labor peace and frustrated the optimism of revolutionaries who expected Germany to become a communist state were not seen as solutions to poverty. Rather, they were insurance, addressing workers’ insecurity.

As I have claimed in my recent book, "Tomorrow 3.0" (Cambridge Press, 2018), we stand on the verge of another wrenching economic revolution, where workers at all levels will once again feel desperately insecure. Many will likely act on that sense of insecurity in irrational and destructive ways.

The cities of the developed world may once again smell acrid smoke and see bricks flying. When workers feel they have nothing to lose and little control over their lives, the system breaks down.

That’s where UBI comes in. If I’m right, and we are in the first stages of an economic revolution, things may get worse fast. There are three kinds of arguments made for a UBI, and they reinforce each other, because there is some value in each of them.